China's resilient online gamers

Bruce Einhorn

Beijing may be successfully forcing companies to censor the Internet in China, but the government’s campaign against online gaming doesn’t seem to be going quite so well. Fretful about young people devoting every waking moment to role-playing games where they slay menacing monsters and rescue distressed damsels on the Internet, regulators last year took action. They decreed that the country’s online gaming providers needed to figure out ways to get Chinese gamers to leave Fantasyland. Companies that had thrived by keeping gamers glued to their PCs had to turn around and create incentives for people to stop playing. It was as if MTV every few hours had to play a block of Barry Manilow videos.

The new government policy worried investors and helped contribute to the stock price slump of some Chinese gaming companies. on Feb. 23, Inc., one of China’s biggest online gaming companies, announced that fourth-quarter 2005 profits soared to $34 million, up 112% over the same period in 2004. NetEase sales were up 75%, to $60 million. Other gaming companies are doing well, too, including Shanghai-based The9 and Shenzhen-based Tencent. The world is full of surprises: Manilow is No. 1 on the charts again, and Chinese gamers are showing that they’re not too bothered by Beijing’s Net nannies.

Before it's here, it's on the Bloomberg Terminal.